Canggu is a place where people go to feel rich. The clicking of keyboards in the Balinese town’s co-working spaces is drowned out only by the roar of mopeds. Over smoothie bowls and lattes, western immigrants – expats, as they prefer to be known – talk about themselves, loudly. A local woman will massage your body, silently, for the equivalent of a few pounds. Everyone is very good-looking. Everything is very cheap.
The town, once a stop-off for backpackers en route to Ubud’s yoga studios and hippy scene, has in recent years become a hub for self-described “digital nomads”. In Canggu’s cafés, barefoot westerners run fledgling companies from MacBook Pros. When not talking Facebook ads or cost-per-click, they socialise exclusively with each other. “The thing is, not many Indonesians are on a level with bule [an Indonesian term for foreigners],” explains one digital nomad over the fart of hot tub jets in Amo, a luxury spa. Around us, statue-like men wander in and out of steam rooms (CrossFit is big here), talking about e-commerce and intermittent fasting.
Inside the city’s co-working spaces (Dojo is the oldest in Canggu, Outpost the new challenger), people are building business empires selling products they’ve never handled, from countries they’ve never visited, to consumers they’ve never met. Welcome to the world of dropshipping.
Dropshipping is a “fulfilment” method. At one end of the supply chain, an entrepreneur identifies a product – usually through Chinese e-commerce platform AliExpress – which they think they can sell to European or American consumers. They create a website using Shopify, and identify and target buyers, typically using Facebook ads, although you will find dropshippers on other platforms, including Instagram, or selling through marketplaces such as online homeware store Wayfair.
When an order is received, the dropshipper purchases the item through AliExpress, and has it shipped directly to the buyer, pocketing their mark-up minus marketing spend. At no point does a dropshipper hold stock: they are simply the middleman in a globalised supply chain.
Successful dropshippers often solve so-called “pain points”. Perhaps you like to go running with your dog, but find holding the lead a chore. A dropshipper finds a hands-free running leash on AliExpress, and targets it via Facebook to dog-loving runners. They’ll create a video showcasing its benefits (videos outperform imagery), and then haunt you with that video until you give in and purchase the item. At this point, you’ll wait up to a month for delivery – lengthy order processing times are a dropshipping tell – because the item is being shipped from China.
Although there is a strong dropshipping scene in other places, notably the mountainous city of Chiang Mai in northern Thailand, Canggu has become an increasingly popular destination, with its affordable cost of living, vibrant café culture and great surf. Agung Suryawan Wiranatha, director of the Centre of Excellence in Tourism at Udayana University in Denpasar, the Balinese capital, says that so-called digital nomads started moving to Canggu about four years ago. Michael Craig, founder of co-working space Dojo, identifies the moment that well-known dropshipper Johnny FD moved to the area, in March 2017, as a turning point – where the popular blogger and YouTuber went, others followed. The following year, Outpost was built in the space of a few months, to meet the community’s growing demand for workspaces.